7U 


UNIVERSE  OF  ILLINOIS-URBANA 


II  llll  I 


3  0112  061606841 


~1 


Appraisal  of  Railroad  Land 


BY 


The  Somers  Unit  System 
of  Realty  Valuation 


A  Study  of  the  Land  Values  of  the 
Broad  Street  Passenger  Terminal 
and  Connecting  Right  of  Way  in 
Philadelphia;  Showing  the  Unit 
Foot  Values  of  Street  Accessibility 
to  Contiguous  and  Similar  Land, 
and  Block  Computations  by  the 
Somers    Rules    and     Tables. 


PUBLISHED  BY 


Manufacturers'  Appraisal  Company 

Cleveland,   Ohio 


^>        Use  of  Somers  System  for  Appraisal  of 
rr:  Railroad  Land  Sites 


By  Walter  W.   Pollock 

President,   Manufacturers'   Appraisal   Company 

Cleveland,   Ohio 


AS  compared  to  the  difficulties  connected  with  the  appraisal  of  the  land 
"used  and  useful"  to  the  railroads  of  the  United  States,  the  task  of 
appraising  the  "man-made"  property  of  the  railroads  is  compar- 
atively simple.  In  the  case  of  property  other  than  land,  the  kinds,  the  quantities 
and  the  unit  prices  for  computing  new  reproductive  costs  may  be  ascertained 
or  computed  with  comparative  ease.  The  difficulty  of  this  task  lies  only  in  its 
magnitude.  The  application  of  factors  of  depreciation,  where  depreciation 
exists,  requires  the  exercise  of  judgment,  but  that  judgment  may  be  simplified 
within  a  reasonable  range  of  diversity  of  opinion.  The  results  of  two  inde- 
pendent appraisals  under  a  specific  understanding  as  to  the  point  of  view  to 
be  worked  out  could  not  show  a  wide  variance  as  to  the  fair  value  of  the 
man-made  property  of  even  the  largest  of  American  railroad  properties. 

LACK  OF   LAND  VALUATION  SYSTEM. 

But  the  valuation  of  the  land  sites  comprising  terminals,  rights  of  way, 
water  privileges  and  business  headquarters  of  the  interstate  railways  involves 
tremendous  difficulties,  both  as  to  the  problem  itself,  and  as  to  the  manner  in 
which  the  work  may  best  be  carried  out.  The  legal  theory  that  the  value  of  a 
land  site  is  what  a  willing  buyer  who  is  not  compelled  to  buy  will  pay  a 
willing  seller  who  is  not  compelled  to  sell,  has  in  the  past  been  so  flexible  as 
to  admit  of  appraisals  by  experts  of  recognized  knowledge,  ability  and  in- 
tegrity varying  hundreds  and  even  thousands  of  per  cent,  one  with  another. 
If  the  appraisal  of  railroad  land  is  to  be  promptly  made,  and  if  it  is  to  have 
any  real  value  after  it  has  been  completed,  there  must  be  adopted  a  standard 
or   system   for   the   appraisal   of   land   values   that   will   enable   the   Interstate 

—3— 


Commerce  Commission  and  the  Railroad  Companies  to  analyze  all  the  elements 
that  go  to  make  up  site  values,  and  to  reach  some  ground  of  substantial  agree- 
ment as  to  the  principles  involved  and  the  means  of  establishing  such  prin- 
ciples in  the  appraisal  of  each  and  all  railroad  properties. 

One  of  the  requirements  of  the  law  directing  the  appraisal  of  the  rail- 
roads is  that  "fair  value"  of  land  sites  shall  be  ascertained.  A  rule  of 
interpretation  of  "fair  value"  was  laid  down  by  the  United  States  Supreme 
Court  in  its  decision  in  the  Minnesota  rate  cases,  when  it  said  the  value  of 
land  should  properly  be  ascertained  "by  comparison  with  the  value  of  con- 
tiguous and  similar  land."  A  similar  and  more  definite  rule  is  laid  down  in 
the  Ohio  statutory  description  of  a  valuation  of  the  land  of  public  utilities 
as  ascertainable  "by  comparison  with  the  value  of  contiguous  and  neighbor- 
ing land  and  land  of  similar  character  as  to  location  and  use." 

SOMERS  SYSTEM  WILL  SOLVE  PROBLEM. 

Both  of  these  descriptions,  I  believe,  are  comprehended  in  the  Somers 
System  Method  of  appraising  land,  and  for  illustrative  purposes  I  have  had 
this  appraisal  made  of  certain  railroad  lands  in  the  city  of  Philadelphia;  and 
an  examination  of  this  report  and  a  careful  study  of  the  methods  followed 
will,  I  believe,  be  helpful  to  those  who  are  charged  with  the  responsibility 
for  the  appraisal  of  land  on  behalf  of  both  the  Government  oflicials  and  the 
common  carriers.  There  is  no  purpose  to  attempt  to  forecast  decision  as  to 
the  question  whether  or  not  present  "fair  value,"  or  original  cost,  or  some 
other  consideration  should  rule  in  the  final  determination.  Nor  is  it  my  pur- 
pose to  attempt  to  say  whether  the  Commission  or  the  carriers  shall  accept 
sales,  rentals,  private  or  community  opinion  as  the  ultimate  basis  for  making 
the  comparisons  of  land  value  defined  in  the  Supreme  Court  decision.  But 
whatever  principles  may  be  determined  upon  will  require  a  standard  for  the 
measurement  of  judgment  that  will  work  uniformly  and  accurately.  A  care- 
ful reading  of  the  description  of  the  Philadelphia  appraisal  will,  I  trust, 
prov.£  that  the  Somers  System  is  at  least  the  best  system  in  existence  for  the 
measurement  of  judgment  as  to  land  values.  Under  its  use  it  will  be  possible 
to  secure  the  widest  possible  comparison  of  the  value  of  contiguous  land 
sites.  Such  comparisons,  when  made  as  to  the  value  of  a  single  element  of 
accessibility,  admit  of  a  true  comparison;  and  when  unit  values  have  once 
been  established,  it  will  be  possible  under  the  Somers  System  mathematical 
tables  to  compute  the  relative  or  comparative  values  of  each  lot  so  as  to  show 
the  enhancement  due  to  each  element  going  to  increase  value,  or  the  lessened 
value  due  to  any  condition  which  may  be  judged  to  detract  from  normal  value. 

NECESSITY    FOR    APPRAISAL    STANDARD    SHOWN. 

A  vivid  illustration  of  the  lack  of  system  in  appraisal  methods  is  found 
in  recent  proceedings  in  New  York  City  to  condemn  four  blocks  of  land  for 
the  new  county  buildings  in  that  city.  A  diagram  of  one  of  these  blocks, 
showing  the  outlines  of  the  several  lots  is  printed  herewith.  Six  of  the  leading 
real  estate  experts  of  New  York  City  gave  sworn  testimony  as  to  the  values 
of  these  lots,  these  expert's  being  represented   in  the  statement  of  appraisal 


opinions  Dy  initial  letters.     Following  these  appraisals  will  be  found  for  each 
lot  the  tax  assessment,  and  a  computation  by  the  Somers  System  tables,  from 


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Map  of  New  York  City  Block  condemned  for  new  Court  House.  See  appraised 
values  for  each  lot  by  expert  appraisers,  by  the  assessor,  and  by  Somers 
System. 


unit    foot   values   of  $2,000    upon   Pearl,    LaFayette    and    Center   Streets,    and 
$1,450   on   Broad   Street.     These   appraisals   are   as   follows: 


Lot  No.  1. 

Appraiser  B $115,500 

D 174,060 

G 120,000 

K 130,000 

P 105,000 

R 106,500 

Tax    Assessment    60,000 

Somers   Computation    99,888 

Lots  Nos.  2,  3,  4,  5. 

Appraiser  B $173,000 

D 305,635 

G 190,000 

K 185,000 

P 145,996 

R 274,500 

Tax   Assessment    114,000 

Somers   Computation    190,604 

Lot  No.  6. 

Appraiser  B $155,000 

"          D 170,000 

"          G 160,000 

' '          K 152,500 

"           P 121,400 

"          R 150,000 

Tax   Assessment    110,000 

Somers   Computation    127,632 

Lot  No.  8. 

Appraiser  B $1,000 

"          D 3,000 

"          G 5,000 

"          K 5,000 

11          P... 5,000 

"          R 2,890 

Tax  Assessment    1,000 

Somers   Computation    1,133 

Lot  No.  18. 


Appraiser  B $40,000 

"  B 94,100 

"  G 47,000 

"  K 37,0,00 

"  P 32,832 

"  R 69,600 

Tax   Assessment    30,000 

Somers   Computation    49,883 


Lot  No.  19. 

Appraiser  B $34,000 

"          D 58,240 

"          G 47,000 

"          K 40,000 

"          P 40,754 

"          E 57,000 

Tax   Assessment    26,000 

Somers   Computation    60,071 


Lot  No.  20. 

Appraiser  B $30,000 

D 41,500 

<<  G 33,000 

"  K 31,000 

"  R 40,550 

Tax   Assessment    20,000 

Somers   Computation    45,871 

Lots  Nos.    21,  29. 

Appraiser  B $120,500 

<<          D 99,610 

"          G 96,000 

<<          K 104,000 

<<           p 98,464 

i*          R 101,650 

Tax   Assessment    65,000 

Somers   Computation    102,012 

Lot  No.  22. 

Tax   Assessment    $17,000 

Somers   Computation    24,709 

Lot  No.  23. 

Appraiser  B $48,000 

<  <  p> 64,150 

G 50,000 

1 1  K 55,000 

"  P 53,609 

tt  jj, 67,500 

Tax   Assessment    45,000 

Somers   Computation    57,772 


— 8— 

Lot  No.  25. 

Appraiser  B $49,000 

"          D 60,000 

"          G 40,000 

"          K 40,000 

"          P 40,672 

"          R 43,935 

Tax   Assessment    25,000 

Somers   Computation    39,904 

Lot  No.  26. 


Appraiser  B $31,000 

D 43,750 

G 28,000 

K 27,500 

P 27,880 

R 33,000 

Tax   Assessment    18,000 

Somers   Computation 31,732 


Lot  No.  27. 


Appraiser  B $33,000 

D 41,215 

G 25,000 

K 27,000 

P 28,240 

E 32,25G 

Tax   Assessment    18,500 

Somers   Computation    30,474 


Lot  No.  28. 


Appraiser  B $29,000 

"          D 35,200 

"          G 26,000 

"          K 26,000 

"          P 27,518 

"          E 30,000 

Tax   Assessment'    17,500 

Somers   Computation    28,956 

It  is  quite  apparent  that  each  appraiser  attempted  to  consider  some  sort 
of  a  mathematical  ratio  in  appraising  those  lots  having  a  single  element  of 
accessibility,  but  that  corner  advantage  was  considered  differently  by  the 
various  experts.  It  is  also  certain  that  these  same  experts,  if  employed  to 
judge  unit  foot  values,  would  practically  agree,  and  that  the  use  of  mathe- 
matical computations  for  corner  lots  would  after  experience  be  approved  by 
them. 


—9— 
TEST    OF    THIS   APPRAISAL    INVITED. 

In  the  appraisal  of  the  Broad  Street  Terminal  property,  I  believe  that 
our  appraisers  have  judged  the  street  unit-foot  values  carefully  and  ac- 
curately. Three  years  ago  a  similar  appraisal  of  $35,000,000  worth  of  Phila- 
delphia business  property,  when  analyzed  by  a  committee  of  disinterested 
experts  appointed  for  the  Philadelphia  City  Councils,  stood  the  test  of  their 
criticism  with  a  net  change  of  less  than  iy2  per  cent.  We  believe  that  no  ap- 
praisal based  upon  public  opinion  and  the  best  disinterested  expert  opinion  in 
the  city  of  Philadelphia  will  change  this  valuation  materially.  Our  appraisal 
has  been  made  upon  our  own  initiative,  in  the  hope  that  both  the  Interstate 
Commerce  Commission  and  the  common  carriers  will  appreciate  the  advantages 
of  the  Somers  System  as  a  standard  for  the  measurement  of  judgment  as  to 
land  values.  We  invite  the  fullest  criticism,  both  of  the  unit-foot  values  and 
of   the   computations  resulting  therefrom. 

PROPERTY  APPRAISED. 

The  appraisal  includes  all  the  property  of  the  Railroad  actually  used  for 
terminal,  yards  and  right-of-way  between  Broad  Street  (West  Penn  Square) 
and  the  Schuylkill  River,  including  a  coal  yard  owned  by  the  Railroad  on 
the  north  side  of  Commerce  Street  between  Twenty-First  and  Twenty-Second 
Streets.  This  coal  yard  has  been  included  as  it  is  contiguous  to  the  right-of- 
way  and  the  Railroad  uses  a  trestle  in  the  yard  for  car  storage. 

The  appraisal  does  not  include  numerous  adjacent  properties  which  have 
been  purchased  for  future  additions  to  terminal,  yards  and   right-of-way. 

No  value  has  been  placed  upon  the  rights  given  the  Railroad  to  cross 
numerous  streets  on  elevated  structures.  Nor  has  any  value  been  placed  on 
the  rights  to  close  certain  streets  except  the  actual  value  of  the  land  as  here- 
inafter indicated. 

That  part  of  the  right-of-way .  of  the  Baltimore  &  Ohio  Railroad  under 
the  right-of-way  of  the  Pennsylvania  Railroad  has  also  been  omitted.  Avail- 
able maps  indicate  that  this  property  belongs  to  the  Pennsylvania  Railroad, 
but  in  the  absence  of  exact  railroad  maps  and  records  it  has  been  omitted. 
This  omission  is  intentional  and  would  not  materially  affect  the  totals  of  the 
appraisal  even  if  included. 

DESCRIPTION    AND    TOTAL    VALUES    OF    LAND. 

The  terminal,  yards  and  right-of-way  of  the  Pennsylvania  Railroad 
covered  by  this  appraisal  occupy  twelve  parcels  of  land  which  have  been 
numbered  for  convenience  of  consideration  in  this  report.  The  boundaries  and 
the  total  values  at  which  we  have  appraised  each  lot,  are  as  follows: 

Block  No.  1 — Rectangular  lot  measuring  122.6  feet  on  Filbert  Street  to  the 
north,  306  feet  on  Broad  Street  (West  Penn  Square)  to  the  east,  122.6 
feet  on  Market  Street  to  the  south,  and  306  feet  on  Fifteenth  Street  to 
the   west    $4,262,188 

Block  No.  2 — Rectangular  lot  measuring  396  feet  on  Filbert  Street  to  the 
north,  306  feet  on  Fifteenth  Street  to  the  east,  396  feet  on  Market  Street 
to  the  south  and  306  feet  on  Sixteenth  Street  to  the  west $3,748,565 


—10— 

Block  No.  3 — Rectangular  lot  measuring  396  feet  on  Filbert  Street  to  the 
north,  306  feet  on  Sixteenth  Street  to  the  west,  396  feet  on  Market  Street 
to  the  south  and  306  feet  on  Seventeenth  Street  to  the  west.  ..  .$1,526,970 

Block  No.  4 — Rectangular  lot  measuring  396  feet  on  Filbert  Street  to  the 
north,  306  feet  on  Seventeenth  Street  to  the  east,  396  feet'  on  Market  Street 
to  the  south  and  306  feet  on  Eighteenth  Street  to  the  west $1,166,125 

Block  No.  5 — Rectangular  lot  measuring  396  feet  on  Filbert  Street  to  the 
north,  106  feet  on  Eighteenth  Street  to  the  east,  396  feet  on  Commerce 
Street  to  the  south  and  106  feet  on  Nineteenth  Street  to  the 
west     $285,640 

Block  No.  5A — Rectangular  lot  at  the  southwest  corner  of  Eighteenth  and 
Commerce  Streets  measuring  74  feet  <m  Commerce  Street  to  the  north, 
55  feet  on  Eighteenth  Street  to  the  east,  74  feet  along  property  now  or 
late  of  Henry  R.  Shock,  and  55  feet  to  the  west  along  property  of 
Fidelity    Storage    &    Warehouse    Company $40,385 

Block  No.  6 — Rectangular  lot  measuring  396  feet  on  Filbert  Street  to  the 
north,  106  feet  on  Nineteenth  Street  to  the  east,  396  feet  on  Com- 
merce Street  to  the  south  and  106  feet  on  Twentieth  Street  to  the 
west     $244,694 

Block  No.  7 — Practically  rectangular  lot  measuring  495  feet  on  Cuthbert 
Street  to  the  north,  268  feet  on  Twentieth  Street  to  the  east,  495.08  feet 
on  Commerce  Street  to  the  south  and  267  feet  on  Twenty-First  Street 
to    the    west    $437,562 

Block  No.  8 — Rectangular  lot  measuring  396  feet  on  Walden  Street  to  the 
north,  364.38  feet  on  Twenty-First  Street  to  the  east,  396  feet  on  Com- 
merce Street  to  the  south  and  364. 3S  feet  on  Twenty-Second  Street  to 
the    west     $419,234 

Block  No.  9 — Practically  rectangular  lot  measuring  273  feet  on  Cuthbert 
Street  to  the  north,  159  feet  on  Twenty-Second  Street  to  the  east,  273  feet 
along  property  of  the  City  of  Philadelphia  to  the  south  and  156  feet  on 
Twenty-Third    Street   to    the    west $98,S9S 

Block  No.  10 — Irregular  lot  measuring  357.1  feet  along  the  property  of  the 
Quaker  City  Mortar  Company  to  the  north,  108  feet  on  Twenty-Third 
Street  to  the  east,  395.5  feet  along  property  of  John  Wanamaker  to  the 
south,  and  irregular  lines  along  right-of-way  of  the  Baltimore  &  Ohio 
Railroad   to   the  west    $51,128 

Block  No.  10A — Irregular  lot  measuring  about  19  feet  along  properties  of  the 
Schuylkill  Improvement  Land  Company  and  Schuylkill  River  East  Side 
Railroad  Company  to  the  north,  about  109  feet  along  right-of-way  of  the 
Baltimore  &  Ohio  Railroad  to  the  east,  25.6  feet  along  property  of  John 
Wanamaker  to  the  south,  and  111.7  feet  on  Schuylkill  River  to  the 
west .     $5,945 


Grand    Total     :  .$12,287,334 

Bridges  over  intersecting  streets  and  the  right-of-way  of  the  Baltimore 
&  Ohio  Railroad  (Schuylkill  River  East  Side  Railroad)  connect  these  sev- 
eral  blocks. 


—11— 

STATEMENT   OF   SURROUNDING   CONDITIONS. 

It  is  our  purpose  to  show  the  true  present  value  of  the  property  included 
in  this  appraisal.  By  this  we  mean  its  present  fair  value  at  an  open  sale, 
presuming  the  various  parcels  were  to  be  abandoned  for  right-of-way,  terminal 
and  yards.  It  is  a  fact  not  to  be  ignored  that  if  all  this  property  were  offered 
for  sale  at  once  there  would  not  be'  a  market  for  it  at  the  appraised  figures, 
but  in  our  opinion  an  appraisal  on  such  a  basis  would  be  neither  fair  nor  an 
indication  of  true  values.  Our  efforts,  therefore,  have  been  directed  to  ascer- 
tain the  fair  value  of  the  various  parcels  based  upon  comparisons  with  the 
present  value  of  contiguous  and  similar  property,  due  consideration  being 
given  to  selling  prices  and  rentals,  and  the  opinions  of  those  familiar  with  this 
section  of  Philadelphia.  The  data  upon  which  the  valuations  given  to  the 
street  units  upon  each  block  was  collected  by  our  Philadelphia  real  estate  ap- 
praisers, and  can  be  submitted  in  proof  of  the  correctness  of  the  unit  values  if 
any  discussion  may  arise  concerning  the  appraised  values. 

This  property  of  the  Pennsylvania  Railroad  is  surrounded  by  real  estate 
of  both  high  and  low  values.  At  the  eastern  end  of  the  right-of-way  is  the 
terminal — Broad  Street  Station — in  the  heart  of  the  city.  It  is  surrounded 
by  high-priced  real  estate  used  by  banks,  office  buildings  and  retail  business. 
The  most  valuable  part  of  the  frontage  is  on  Market  Street,  directly  opposite 
the  entrance  to  the  station.  It  is  there  that  a  Somers  unit-foot  has  been 
valued  at  $10,000.  The  second  most  valuable  frontage  owned  by  the  railroad 
is  that  on  Broad  Street  (West  Penn  Square),  where  the  unit  value  has  been 
appraised  at  $8,000.  Filbert  Street  to  the  north  is  somewhat  less  valuable, 
as  indicated  by  the  unit  value  of  $6,500. 

South  of  Market  Street,  Fifteenth  Street  is  the  most  valuable  north  and 
south  street  in  the  city  except  Broad.  Its  value  between  Market  and  Filbert 
Streets  has  been  placed  at  $4,000  a  unit  foot,  which  is  somewhat  higher  than 
values  in  the  same  thoroughfare  north  of  Filbert.  Although  this  block  is  not 
the  largest  of  the  several  comprising  the  property  of  the  railroad,  it  is  the 
most  advantageously  situated  and  most  valuable. 

West  of  Fifteenth  Street  there  is  a  complete  change  in  the  character  of 
the  usefulness  of  land  sites,  and  values  decrease  rapidly.  Immediately  west 
the  unit  value  on  Market  Street  is  $5,500,  gradually  lessening  until  it 
reaches  $3,600  near  Sixteenth  Street.  From  there  it  shades  down  gradually 
on  the  north  side  of  the  street  to  $850  at  the  Schuylkill  River. 

The  decrease  in  values  on  Filbert  Street  is  even  more  marked.  From  a 
desirable  retail  and  transient  hotel  location,  now  somewhat  impaired  by  the 
beginning  of  a  parkway,  it  rapidly  becomes  a  second-rate  business  and  lodg- 
ing house  district.  The  railroad  has  acquired  many  of  the  properties  in  this 
section  of  Filbert  Street  and  the  cross  streets.  Values  have  been  stationary 
for  several  years,  and  some  owners  have  been  glad  to  dispose  of  their  holdings 
at  low  prices. 

West  of  Fifteenth  Street  the  values  of  the  cross  streets  are  invariably 
less  than  the  value  of  Market  Street,  and  more  than  that  of  Filbert  Street  at 
the  points  of  intersection.  There  is  not  a  constant  ratio,  but  it  approximates 
one-third  to  one-half. 

The  values  of  frontages  on  the  Schuylkill  River  and  the  Baltimore  &  Ohio 
Railroad  north  of  Market  Street  are  somewhat  uncertain.     There  is  little  active 


—12— 


*********+****-H^^ 


PROPERTY  OF  THE  PENNS: 

BETWEEN     BROAD    STREET   AMO     3 

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MANUFACTURERS'  APPRAI5A 

BY    THE     50MER3    UNIT 

J  UN 


MAP    OF    BROAD    STREET    STATION    OF    PENNSYLVANIA    RAILROAD 
IN  PHILADELPHIA.     The  figues  in  streets  represent  values  of  Somers 


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—13- 


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fVANIA  RAILROAD  COMPANY 

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ATING   APPRAISED  VALUES. 

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J      L 


J       L 


J      L 


700 


800 


900 


1100 


14-00 


1600 


(ALLEY) 


(ALLEY) 


C  i 


1800 


(allcvJ       cuTm  bek 


2500 

3000 

o 
o 

o 
CM 

stwc  c  T 

Ollevj 

450 


N25 


o 


1300 
1400 


500 


N54 


700 

n — nr— 


Ns3 


1400 
MARKET  STREET 
1500 


1800 

2000 


n 

1000 

1800 

_ 

• 

--4  --- 

N?2                    j 

z 

5 

; 

t_ 


O  m 
o  „ 
o  2     r- 


6500 


•N^l     : 


O 

o 


250  LUDLOW 


|«*N3TEAO    250     3THEET 


5TREE T 

325 

Q 

'.> 

<T> 

^  -00  ""ti  i 

*> 

.' 

400 


3600  5500 

4000     4750     6000 


10000 
I  1 000 


u 

r 

U 

o 
- 

r, 

0 

<  > 

> 

CO 

. 

APPRAJ5ED  VALUES 
Slock m     »4  262.188 
2       3. 748. 565 
1.526.970 


3 

4 

5 

S-A 

6 

7 

8 

9 

10 

IOA 


1,166.125 

285,640 

40.385 

244.694 

437  562 

419  234 

98  898 

51.128 

594  5 


TOTAL*  12  287334 


W 


O 

O  5    PEMN      5QUARE 

o     7000     9000     1 0000 


2300 


CHESTNUT 


3000 


4000 


6000 


3000 


13000 


r 


i    r 


"I    r 


D    BY 

OMPANY  .  CLEVELAND. OHIO 

TEM    Or   REALTY     VALUATION 
113 


i    r 


SCALE   I    inch  -  IQ0  recT 


i    r 


Unit-Foot.     Heavy  lines  represent  the  property  appraised.     Dotted  lines 
represent  areas  of  computation. 


;-  H^^**4"H..HHH..HHH"H'.H"H''H'fr'M^ 


/- 


—14— 

demand  at  either  point,  but  with  one  exception  such  land  as  is  not  used  by 
various  railroads  is  occupied  by  factories  and  warehouses.  Almost  all  such 
land  has  some  additional  means  of  access  of  greater  value  than  either  the 
Baltimore  &  Ohio  Railroad  or  the  Schuylkill  River.  Consideration  of  all  avail- 
able facts  regarding  such  property  has  led  to  the  valuation  of  units  of  $100 
on  both  River  and  Railroad. 

THE  SOMERS  SYSTEM  OF  APPRAISAL  BRIEFLY  EXPLAINED. 

In  making  this  appraisal  the  Somers  Unit  System  of  Realty  Valuation 
was  used.  This  system  is  partly  the  discovery — partly  invention — of  Mr. 
W.  A.  Somers  of  New  York  City.  It  is  based  upon  the  acknowledged  prin- 
ciples of  land  valuation,  as  developed  by  Mr.  Somers  by  many  years  of  in- 
vestigation, and  is  mathematical  in  its  operation.  Briefly  it  may  be  described 
as  based  upon  the  following  theories: 

There  is  a  mathematical  relation  between  the  values  of  all  city  sites  sub- 
ject to  the  same  influences  of  street  accessibility  or  usefulness.  In  the  valua- 
tion of  land  this  fact  is  of  basic  importance,  establishing  as  it  does  a  law  of 
appraisal.  To  illustrate  in  simplest  form,  if  at  a  certain  location  one  foot 
front  of  a  given  depth  is  worth  $1,000,  twenty  feet  will  be  worth  $20,000,  and 
thirty-six  feet,  $36,000.  The  relation  is  clearly  mathematical,  and  is  acknowl- 
edged in  valuations  of  sites  having  simple  problems  for  consideration. 

There  is  an  equally  definite  relation  between  the  values  of  sites  of  in- 
terior different  depths.  For  example,  the  value  of  a  front  foot  100  feet  deep 
being  known,  all  real  estate  experts  agree  that  the  front  fifty  feet  is  worth 
between  two-thirds  and  three-fourths  of  the  total  value.  The  most  careful 
investigation  as  to  the  relative  values  of  sites  of  different  depths  ever  con- 
ducted was  made  by  Mr.  Somers.  The  results  of  this  investigation  have  been 
summarized  in  the  form  of  a  table  showing  the  relation  in  percentages  be- 
tween a  site  100  feet  deep,  and  every  receding  foot  from  one  to  700.  This 
table  may  be  said  to  be  a  practical  statement  of  the  law  of  the  constant  effect 
of  depth  upon  site  values. 

The  mathematical  relation  between  the  values  of  lots  having  a  single 
street  accessibility — those  not  affected  by  corner  influences — is  acknowledged 
by  every  real  estate  broker,  expert,  assessor,  buyer  and  seller  of  realty.  Be- 
cause of  less  general  knowledge  and  understanding  of  the  subject,  there  is 
less  agreement  as  to  the  definite  mathematical  relation  between  the  values  of 
lots  at  and  near  corners,  as  compared  with  the  interior  frontage  sites  on  the 
streets  forming  a  corner,  although  the  relation  is  just  as  mathematically 
exact.  This  relation  may  be  stated  in. this  form:  The  value  of  every  lot  at 
and  near  a  corner  is  directly  due  to  and  proportionate  to  the  values  of  the 
intersecting  streets.  Opinion  as  to  the  usefulness  of  the  streets  being  in 
truth  the  basis  of  all  judgments  of  site  values,  the  Somers  computation  system 
has  been  designed  to  secure  the  most  intelligent  expression  as  to  the  value  of 
street  usefulness  in  the  form  of  appraisal  of  the  value  of  a  Somers  unit-foot 
(at  points  away  from  corner  influence)  and  to  compute  mathematically  the 
normal  relation  thereto  of  lots  enhanced  by  nearness  to  and  location  at  cor- 
ners. If  for  any  reason  an  abnormal  condition  affects  corner  values  favor- 
ably or  unfavorably,  addition  or  deduction  therefor  may  be  made  as  for  a 
separate  factor. 


-15- 


The  Somers  System  provides  for  the  mathematical  calculation  of  values 
of  land  at  and  near  corners.  At  the  corner  to  be  computed  is  drawn  a  dia- 
gram 100  feet  square,  and  this  lot  is  divided  into  100  squares,  ten  feet  square 
each.     The  Somers  corner  tables  give  the  value  of  each  of  these  squares  for 


h 

UJ 

q: 

h 

(0 


10 

20 

30 

40 

50 

60 

70 

80 

qo 

100 

q 

iq 

sq 

sq 

4q 

sq 

6q 

7q 

sq 

qq 

8 

18 

28 

38 

48 

58 

68 

78 

88 

qs 

7 

17 

27 

37 

47 

57 

67 

77 

87 

q7 

6 

16 

26 

36 

46 

56 

66 

76 

86 

q6 

5 

15 

25 

35 

45 

55 

65 

75 

35 

35 

4 

14 

24 

34 

44 

54 

64 

74 

84 

34 

3 

13 

23 

33 

42 

53 

63 

73 

83 

33 

2 

12 

22 

32 

42 

52 

62 

72 

82 

q2 

1 

II 

2! 

31 

41 

5! 

61 

71 

81 

qi 

<  BEST  STREET 

Diagram  showing  distribution  of  corner  influence  by  10-foot  squares  by  the 
Somers  System. 

every  conceivable  combination  of  values  coming  together  at  the  corner.  The 
values  given  in  these  tables  are  comparable  in  a  sense  to  a  table  of  logarithms, 
or  an  interest  table.  These  tables  express  values  in  dollars,  and  they  are  al- 
ways the  estimate  compiled  by  Mr.  Somers  of  the  mathematical  effect  of  the 
appraised  unit  values  of  the  two  streets  upon  each  ten-foot-square  plot,  no 
matter  where  in  the  100-foot  square  it  may  be  located.  The  ten-foot-square 
plot  at  the  corner  of  two  intersecting  streets  is  the  most  valuable,  the  values 
of  the  other  squares  receding  in  curves  in  every  direction  from  this  corner 
square.  These  curves  are  commensurate  with  the  mathematical  effect  of  one 
unit  value  upon  the  other.  The  actual  lots  to  be  computed  are  diagrammed 
upon  the  100-foot  square  at  the  corner,  and  the  total  value  of  each  square  and 
part  of  a  square  inside  the  lot  lines  is  ascertained  by  addition,  thus  pro- 
ducing the  value  of  each  lot,  and  apportioning  to  each  lot  within  the  corner 
influence  its  share  of  the  enhancement  of  value  by  reason  of  the  street  inter- 
section. It  does  not  matter,  therefore,  in  what  way  the  land  at  the  corner  isj^ 
divided  as  to  lots,  as  there  will  be  actual  computation  in  dollar  value  for' 
every  part  of  it,  instead  of  the  addition  of  an  arbitrarily  selected  percentage 
as  compared  with  the  value  of  interior  lots  on  either  of  the  intersecting 
streets.     When  the  enhancement  of  value  does  not  reach  100  feet  in  either  di- 


i 


—16— 

icction  from  the  corner,  these  corner  lot  tables  measure  it  only  as  far  as  it 
goes.  When  the  enhancement  of  value  extends  beyond  100  feet,  there  is  an- 
other set  of  tables,  called  "overlap  tables,"  which  not  only  compute  the  fact, 
but  also  the  exact  place  where  the  enhancement  extends,  and  the  amount  that 
each  foot  of  land  is  enhanced.  In  other  words,  whatever  the  corner  effect, 
the  Somers  System  works  out  that  effect  into  dollars. 

By  mechanical  devices  these  same  corner  lot  tables  and  overlap  tables 
may  be  applied  to  lots  at  acute  and  obtuse  angle  corners.  By  means  of  "zone 
tables,"  irregularly  shaped  lots  are  valued  upon  the  basis  of  the  judgment 
of  the  value  of  the  unit.  By  this  same  set  of  tables  is  ascertained  the  exact 
extent  of  the  influence  of  a  street,  so  that  when  a  lot  extends  through  from 
one  street  to  another,  it  is  possible  to  discover  exactly  the  point  where  the 
influences  of  two  streets  on  the  opposite  side  of  a  block  meet  at  a  common 
value. 

Alley  effect  is  generally  treated  as  follows:  The  land  value  of  the  alley 
is  computed,  based  upon  the  unit  values  controlling  it,  and  that  land  value  is 
pro-rated  against  every  foot  of  land  abutting  upon  the  alley. 

There  are  five  processes  in  valuing  sites  by  the  Somers  System: 

First — The  use  of  the  depth  curve,  or  percentage  of  depth  table,  showing 
the  value  of  interior  lots  without  alleys,  as  compared  with  the  value  of  the 
unit. 

Second — The  corner  lot  tables,  by  which  the  enhanced  value  at  or  near 
corners  is  mathematically  and  equitably  distributed. 

Third — the  zone  tables,  by  which  the  value  of  irregular  shapes  is  ascer- 
tained. 

Fourth — The  over-lap  tables,  by  which  the  effect  of  streets  whose  influ- 
ences run  in  opposite  directions  is  exactly  ascertained,  thus  making  it  possible 
to  apply  unit  values  to  lots  running  from  street  to  street,  and  also  to  ascertain 
other  valuable  data  for  land  valuation. 

Fifth — Alley  valuation,  by  which  the  effect  of  alleys  is  equitably  distri- 
buted. 

It  will  therefore  be  seen  that  the  Somers  System  is  most  comprehensive 
in  its  scope,  and  that  it  undertakes  to  ascertain  and  value  every  separate 
factor,  and  every  combination  of  factors,  and  is  workable  in  every  part  of 
every  city. 

In  appraising  land  values  it  is  necessary  to  make  numerous  comparisons 
of  location  and  streets.  The  expert  knowing  that  land  in  a  given  location  is 
worth  a  certain  amount,  reaches  an  opinion  regarding  the  adjacent  location 
under  consideration  by  making  comparisons.  The  one  great  objection  to  such 
methods  is  that,  in  the  absence  of  a  comprehensive  valuation  system,  intelligent 
comparisons  cannot  be  made  of  unlike  quantities.  Thus  the  most  expert 
appraiser  cannot  satisfactorily  compare  the  value  of  an  inside  lot  37x160  feet, 
judged  to  be  worth  $12,000,  with  the  value  of  an  inside  lot  24x95  feet  ad- 
joining. Before  the  comparison  can  be  made  the  problem  must  be  simplified. 
The  appraiser  must  find  the  value  of  the  first  lot  per  front  foot;  then  allow- 
ance must  be  made  for  the  lesser  depth  of  the  lot  of  unknown  value.  When 
this  is  done,  the  value  of  the  second  lot  may  be  obtained  by  multiplying  by 
the  frontage  of  twenty-four  feet. 


—17— 

Variations  in  sizes,  shapes  and  locations  preclude  any  real  comparison. 
The  Somers  System  overcomes  this  difficulty  by  the  adoption  of  a  quantity- 
unit,  which  is  to  land  valuation  what  the  yardstick  is  to  the  dry-goods  mer- 
chant, the  quart  to  the  milk  dealer,  the  pound  to  the  grocer.  It  is  a  unit  or 
standard  of  quantity.  A  Somers  unit-foot  may  be  defined  as  a  frontage  of 
ground  one  foot  wide  and  100  feet  deep,  located  in  the  central  section  of  a 
block  at  a  distance  from  any  street  corner  or  other  influence  that  might  affect 
its  value,  other  than  that  which  it  obtains  by  reason  of  access  to  the  life  and 
business  of  the  city  through  its  own  frontage.  By  confining  judgment  of 
values  to  the  unit-foot  the  confusing  factors  of  size  and  shape,  and  enhance- 
ment due  to  corners  and  alleys,  are  for  the  time  eliminated.  Opinions  regard- 
ing the  value  of  a  unit-foot  can  be  easily  compared,  while  opinions  regarding 
values  of  lots  of  different  size  and  shape,  cannot  be  intelligently  compared. 

Therefore  the  bases  of  all  values  are  indicated  in  this  report  in  both  text 
and  maps  as  the  value  of  a  unit-foot.  It  is  from  the  various  unit  values  that 
the  values  of  lots  and  blocks  are  computed  after  determination  by  the  Somers 
System.  In  order  that  a  comprehensive  idea  of  land  values  throughout  the 
section  of  the  city,  in  which  the  property  of  the  Railroad  is  located  may  be 
had,  the  accompanying  map  shows  the  judgment  of  our  land  appraisers  of  the 
value  of  a  unit-foot  upon  all  block  frontages  from  Broad  Street  to  the  Schuyl- 
kill River,  Chestnut  to  Arch  Streets.  This  shows  a  practical  interpretation  of 
the  thought  apparent  in  the  mind  of  Justice  Hughes  of  the  United  States 
Supreme  Court,  when  he  decided  that  the  proper  course  to  be  followed  in  the 
appraisal  of  railroad  land  should  be  "by  comparison  with  the  value  of 
contiguous  and  similar  land."  We  have  not  only  appraised  all  of  the  land 
comprising  the  railroad  right-of-way,  but  we  have  also  at  the  same  time  ex- 
tended the  comparisons  of  the  relative  and  actual  values  of  various  street 
frontages  over  many  other  contiguous  and  similar  blocks,  the  additional  land 
values  involved  being  probably  in  the  neighborhood  of  $50,000,000. 

ANALYSIS    OF    COMPUTATIONS. 

The  appraised  values  shown  in  this  report  were  computed  from  the  unit 
values  indicated  on  the  map  by  the  various  processes  comprising  the  Somers 
System,  with  the  following  results: 

Block    No.    1— Unit    Values— Market    Street,    $10,000;    Penn    Square,    $8,000; 
Filbert  Street,  $6,500;  Fifteenth  Street,  $4,000. 

By  means  of  the  over-lap  tables  the  point  of  contact  between  the  $8,000 
unit  value  on  Penn  Square  and  the  $4,000  unit  value  on  Fifteenth  Street  is 
found  to  be  90  feet  back  from  Broad  Street,  and  32.6  feet  back  from  Fifteenth 
Street.  The  Somers  corner  tables  show  the  values  of  the  parts  of  the  lot  at 
and  near  the  corners,  so  the  lot  is  divided  for  purposes  of  calculation  into  six 
sections.  From  the  Somers  corner  tables  it  *is  found  that  the  section  90x100 
feet  at  the  northwest  corner  of  Market  Street  and  Penn  Square  is  worth 
$1,369,300;  the  section  32.6x100  feet  at  the  northeast  corner  of  Market  and 
Fifteenth  Streets  is  worth  $460,210;  the  section  100x90  feet  at  the  southwest 
corner  of  Penn  Square  and  Filbert  Street  is  worth  $1,031,872;  and  the  section 
32.6x100  feet  at  the  southeast  corner  of  Filbert  and  Fifteenth  Streets  is  worth 
$347,802.     The  interior  section   106x90  feet  on  Penn   Square   is  calculated   from 


—18— 

the  unit  value  of  $8,000  to  be  worth  $810,688,  and  the  corresponding  section 
on  Fifteenth  Street  106x32.6  feet,  is  calculated  from  the  unit  value  of  $4,000 
to  be  worth  $242,316.     Total  value  of  block,  $4,262,188. 

Block  No.  2— Unit  Values— Market  Street,  $5,500,  decreasing  to  $3,600;  Fif- 
teenth Street,  $4,000;  Filbert  Street,  $1,800,  decreasing  to  $1,000;  Six- 
teenth Street,  $1,200. 

The  point  of  contact  between  the  average  of  the  unit  values  on  Market 
Street  ($4,550),  and  the  average  of  the  unit  values  on  Filbert  Street  ($1,400) 
is  190  feet  from  Market  Street  and  116  feet  from  Filbert  Street.  These  two 
divisions,  with  the  four  at  the  corners  and  the  two  abutting  on  Fifteenth 
Street  and  Sixteenth  Street  respectively,  divide  the  block  into  eight  sections, 
four  regular  and  four  irregular  sections.  From  the  Somers  corner  tables  it  is 
found  that  the  section  100x100  at  the  northwest  corner  of  Market  and  Fif- 
teenth Streets  is  worth  $727,809;  the  section  100x100  feet  at  the  southwest 
corner  of  Fifteenth  and  Filbert  Streets  is  worth  $477,620;  the  section  lOOx 
100  at  the  northeast  corner  of  Market  and  Sixteenth  Streets  is  worth  $415,742; 
and  the  section  100x100  at  the  southeast  corner  of  Sixteenth  and  Filbert 
Streets  is  worth  $166,606.  From  the  average  unit  value  on  Market  Street  of 
$4,550,  it  is  found  that  the  irregular  section  fronting  196  feet  on  Market 
Street  is  worth  $1,100,742,  and  the  corresponding  section  fronting  196  feet  on 
Filbert  Street  is  calculated  from  the  average  unit  value  of  $1,400  to  be  worth 
$273,994.  The  section  fronting  106  feet  on  Fifteenth  Street  is  calculated 
from  the  unit  value  of  $4,000  to  be  worth  $476,072,  and  the  similar  section 
fronting  106  feet  on  Sixteenth  Street  is  calculated  from  the  unit  value  of 
$1,200  to  be  worth  $109,980.     Total  value  of  block,  $3,748,565. 

The  irregular  shapes  in  the  four  interior  sections  as  shown  on  the  map 
are  caused  by  the  varying  effects  of  the  streets.  Market  Street  effect  (meas- 
ured at  $3,600  per  unit  foot)  is  felt  beyond  the  first  100  feet  from  the  corner 
of  Market  and  Sixteenth  Streets,  (measured  at  $1,200  per  unit  foot.)  The 
diagonal  line  extending  from  a  point  30  feet  from  Sixteenth  Street  on  the 
100-foot  line,  marks  the  point  of  contact  between  the  effect  of  Market  and 
Sixteenth  Streets.  There  is  an  overlapping  of  street  effects  in  so  much  of  this 
larger  area  as  is  found  in  the  triangular  area  made  by  the  diagonal  line,  the 
100-foot  line,  and  the  second  100-foot  line  extended  from  Market  Street.  This 
analysis  illustrates  the  method  of  ascertaining  the  extent  of  "corner  influ- 
ence," when  such  influence  extends  farther  than  100  feet  from  the  corner. 

The  same  reasons  obtain  for  the  diagonal  lines  on  the  sides  of  all  of  the 
irregular  areas  of  this  and  other  diagrams  in  this  part  of  this  report;  there- 
fore it  will  not  be  necessary  to  repeat  the  explanations  of  the  effect  of  over- 
lap in  this  or  other  blocks. 

Block  No.  3 — Unit  Values— Market  Street,   $1,800;   Sixteenth   Street,   $1,200; 
Seventeenth  Street,  $900;  Filbert  Street,  $700. 

The  method  of  calculating  is  the  same  as  that  used  in  Block  No.  2.  The 
point  of  contact  between  Market  and  Filbert  Streets  is  found  to  be  190  feet 
from  Market  Street  and  116  feet  from  Filbert  Street.  The  section  100x100 
feet  at  the  northwest  corner  of  Market  and  Sixteenth  Streets  is  found  from 
the  corner  tables  to  be  worth  $233,899;  the  section  100x100  at  the  northeast 
corner  of  Market  and  Seventeenth  Streets  is  worth  $218,392;  the  section  lOOx 


—19— 

100  at  the  southwest  corner  of  Sixteenth  and  Filbert  Streets  is  worth  $149,594; 
and  the  section  100x100  at  the  southeast  corner  of  Seventeenth  and  Filbert 
Streets  is  worth  $121,971.  The  irregular  section  fronting  196  feet  on  Market 
Street  is  calculated  from  the  $1,800  unit  value  and  depth  percentage  table  to 
be  worth  $434,448;  the  similar  section  fronting  196  feet  on  Filbert  Street  is 
calculated  from  the  $700  unit  value  to  be  worth  $137,695.  The  section  front- 
ing 106  feet  on  Sixteenth  Street  is  similarly  calculated  from  the  $1,200  unit 
value  to  be  worth  $136,930;  and  the  section"  fronting  106  feet  on  Seventeenth 
Street  is  calculated  on  the  $900  unit  value  to  be  worth  $94,041.  Total  value 
of  block,  $1,526,970. 

Block  No.  4— Unit  Values— Market   Street,  $1,400;   Seventeenth   Street,   $900; 
Eighteenth   Street,   $700;    Filbert   Street,   $500. 

This  block  is  calculated  in  the  same  manner  as  Block  No.  3,  the  point  of 
contact  being  at  the  same  distance  from  Market  and  Filbert  Streets.  From 
the  Somers  corner  tables  it  is  found  the  section  100x100  at  the  northwest 
corner  of  Market  and  Seventeenth  Streets  is  worth  $178,451;  the  section  lOOx 
100  at  the  northeast  corner  of  Market  and  Eighteenth  Streets  is  worth  $169,- 
860;  the  section  100x100  at  the  southwest  corner  of  Seventeenth  and  Filbert 
Streets  is  worth  $111,377;  and  the  section  100x100  at  the  southeast  corner  of 
Eighteenth  and  Filbert  Streets  is  worth  $91,803.  The  section  fronting  196  feet 
on  Market  Street  is  calculated  from  the  $1,400  unit  value  to  be  worth  $337,- 
904;  and  the  corresponding  section  fronting  196  feet  on  Filbert  Street  is  cal- 
culated from  the  $500  unit  value  to  be  worth  $98,354.  The  section  fronting 
106  feet  on  Seventeenth  Street  is  calculated  from  the  $900  unit  value  to  be 
worth  $102,699;  and  the  section  fronting  106  feet  on  Eighteenth  Street  is 
calculated  from  the  $700  unit  value  to  be  worth  $75,677.  Total  value  of 
block,  $1,166,125. 

Block  No.  5 — Unit  Values — Eighteenth  Street,  $700;   Nineteenth  Street,  $550; 
Filbert  Street,  $450;   Commerce  Street,  $200. 

The  point  of  contact  is  found  to  be  70  feet  from  Filbert  Street  and  36 
feet  from  Commerce  Street.  These  two  sections,  with  the  four  at  the  corners, 
divide  the  block  into  six  divisions  for  calculating.  From  the  Somers  corner 
tables  it  is  found  that  the  section  70x100  feet  at  the  southwest  corner  of 
Eighteenth  and  Filbert  Streets  is  worth  $67,610;  the  section  70x100  feet  at 
the  southeast  corner  of  Nineteenth  and  Filbert  Streets  is  worth  $58,780;  the 
section  36x100  feet  at  the  northwest  corner  of  Eighteenth  and  Commerce 
Streets  is  worth  $33,166;  and  the  section  36x100  feet  at  the  northeast  corner 
of  Nineteenth  and  Filbert  Streets  is  worth  $26,947.  The  section  196x70  feet 
fronting  on  Filbert  Street  is  calculated  from  the  unit  value  of  $450  to  be 
worth  $75,499;  and  the  similar  section  196x36  feet  on  Commerce  Street  is 
calculated  from  the  $200  unit  value  to  be  worth  $23,638.  Total  value  of 
block,  $285,640. 

Block  No.  5A— Unit  Values— Eighteenth  Street,  $700;  Commerce  Street,  $200. 

All  of  this  lot  lies  within  the  influence  of  the  corner,  and  its  value  is 
taken  directly  from  the  corner  tables.     Total  value  of  block,  $40,385. 


—20— 

Block  No.  6 — Unit  Values — Nineteenth  Street,  $550;  Twentieth  Street,  $450; 
Filbert  Street,  $400;   Commerce  Street,  $200. 

The  point  of  contact  is  found  to  be  80  feet  from  Filbert  Street  and  26 
feet  from  Commerce  Street.  From  the  Somers  corner  tables  the  value  of  the 
section  80x100  feet  at  the  southwest  corner  of  Nineteenth  and  Filbert  Streets 
is  found  to  be  $61,544;  the  section  80x100  at  the  southeast  corner  of  Twen- 
tieth and  Filbert  Streets  is  worth  $55,094;  the  section  26x100  at  the  north- 
west corner  of  Nineteenth  and  Commerce  Street's  is  worth  $20,417;  and  the 
section  26x100  feet  at  the  northeast  corner  of  Twentieth  and  Commerce  Streets 
is  $17,490.  The  section  196x80  feet  fronting  on  Filbert  Street  is  calculated 
from  the  unit  value  of  $400  to  be  worth  $71,266;  and  the  corresponding 
section  196x26  feet  on  Commerce  Street  is  similarly  calculated  from  the  $200 
unit  value  to  be  worth  $18,883.     Total   value  of  block,  $244,694. 

Block  No.  7 — Unit  Values — Twentieth  Street  south  of  Filbert,  $450;  north  of 
Filbert,  $350;  Twenty-First  Street  south  of  Filbert,  $450;  north  of  Filbert, 
$350;  Commerce  Street,  $150;  Cuthbert  Street,  $100. 

In  appraising  a  large  block  of  ground  of  this  character,  it  is  necessary  to 
consider  its  general  availability  for  use,  and  such  consideration  at  once  leads 
to  the  conclusion  that  the  block  is  too  large  to  be  used  to  the  best  advantage 
in  its  present  form.  It  so  happens  that  for  its  own  use  the  Pennsylvania 
Eailroad  finds  it  desirable  to  close  Filbert  Street,  the  City  of  Philadelphia 
having  officially  vacated  the  street  at  the  request  of  the  Railroad.  For  gen- 
eral use,  however,  this  block  would  be  more  desirable  if  Filbert  Street  were 
run  through  it,  and  the  loss  of  the  area  contained  in  the  bed  of  Filbert  Street 
would  be  more  than  made  up  by  the  gain  in  the  value  due  to  the  greater 
accessibility.  The  value  of  the  unit  in  Filbert  Street  which  for  calculating 
purposes  has  been  laid  out,  is  placed  at  $300.  This  divides  the  block  into 
two  sections,  each  section  being  calculated  as  though  it  were  surrounded  by 
actual  streets. 

The  point  of  over-lap  in  the  section  to  the  north  of  the  line  of  Filbert 
Street  is  100  feet  from  that  thoroughfare,  and  sixteen  feet  from  Cuthbert 
Street.  From  the  Somers  corner  tables  it  is  found  that  the  value  of  the 
section  100x100  feet  at  the  northwest  corner  of  Twentieth  and  Filbert  Streets 
is  $49,292;  the  section  100x100  at  the  northeast  corner  of  Twenty-First  and 
Filbert  Streets  is  $49,292;  the  section  16x100  feet  at  the  southwest  corner  of 
Twentieth  and  Filbert  Streets  is  $8,171;  and  the  section  at  the  southeast  cor- 
ner of  Twenty-First  and  Cuthbert  Streets  is  $8,171.  The  section  295x100  feet 
on  Filbert  Street  is  calculated  from  the  $300  unit  value  to  be  worth  $88,500, 
and  the  corresponding  section  295x16  feet  on  Cuthbert  Street  is  calculated 
from  the  $100  unit  value  to  be  worth  $10,301. 

In  that  portion  of  the  block  to  the  south  of  the  line  of  Filbert  Street  the 
point  of  contact  is  found  to  be  80  feet  from  Filbert  Street  and  21  feet  from 
Commerce  Street.  From  the  corner  tables  it  is  found  that  the  section  80x100 
feet  at  the  southwest  corner  of  Twentieth  and  Filbert  Streets  is  worth 
$48,858;  the  section  80x100  feet  at  the  southeast  corner  of  Twenty-First  and 
Filbert  Streets  is  worth  $48,858;  the  section  21x100  feet  at  the  northwest 
corner  of  Twentieth  and  Commerce  Streets  is  worth  $13,433;  and  the  value 
of  the  section  21x100  feet  at  the  northeast  corner  of  Twenty-First  and  Com- 


—21— 

merce  Streets  is  $13,433.  The  section  295x80  feet  fronting  on  Filbert  Street 
is  calculated  from  the  $300  unit  value  to  be  worth  $80,447;  and  the  corre- 
sponding section  295x21  feet  on  Commerce  Street  is  calculated  from  the  $150 
unit  value  to  be  worth  $18,806.     Total  value  of  block,  $437,562. 

Block  No.  8 — Unit  Values — Twenty -First  Street  south  of  Filbert,  $450;  north 
of  Filbert,  $350;  Twenty-Second  Street  south  of  Filbert  Street,  $350;  north 
of  Filbert,  $250;   Commerce  Street,  $150;  Walden  Street,  $100. 

For  the  same  reasons  that  Filbert  Street  was  projected  through  Block 
No.  7,  it  was  also  projected  through  Block  No.  8,  and  a  calculating  unit  value 
of  $250  placed.  Formerly  Cuthbert  Street  also  extended  through  this  block. 
In  this  case,  however,  there  was  no  advantage  gained  thereby,  and  to  reopen 
the  street  would  be  to  destroy  value  rather  than  create  it.  The  opening  of 
Filbert  Street  would  suffice  to  give  ample  accessibility  to  this  area,  and  ad- 
ditional streets  would  be  a  detriment  rather  than  a  benefit. 

In  the  portion  of  the  block  to  the  north  of  the  line  of  Filbert  Street  the 
point  of  over-lap  is  130  feet  from  Filbert  Street  and  40  feet  from  Walden 
Street.  From  the  corner  tables  it  is  found  that  the  section  100x100  feet  at 
the  northwest  corner  of  Twenty-First  and  Filbert  Streets  is  worth  $45,901; 
the  section  100x100  feet  at  the  northeast  corner  of  Twenty-Second  and  Filbert 
Streets  is  worth  $37,750;  the  section  70x100  feet  at  the  southwest  corner  of 
Twenty -First  and  Walden  Streets  is  worth  $30,369;  and  the  section  70x100 
feet  at  the  southeast  corner  of  Twenty-Second  and  Walden  Streets  is  worth 
$21,821.  The  section  196x100  feet  fronting  on  Filbert  Street  is  calculated 
from  the  unit  value  of  $250  to  be  worth  $54,145,  and  the  corresponding  section 
196x70  feet  on  Walden  Street  is  calculated  from  the  $100  unit  value  to  be 
worth  $12,544. 

In  that  portion  of  the  block  south  of  the  line  of  Filbert  Street  the  point 
of  contact  is  at  a  distance  of  95  feet  from  Filbert  Street,  and  48  feet  from 
Commerce  Street.  From  the  corner  tables  it  is  found  that  the  section  95x100 
feet  at  the  southwest  corner  of  Twenty-First  and  Filbert  Streets  is  worth 
$53,424;  the  section  95x100  feet  at  the  southeast  corner  of  Twenty-Second 
and  Filbert  Streets  is  worth  $44,134;  the  section  48x100  feet  at  the  northwest 
corner  of  Twenty-First  and  Commerce  Streets  is  worth  $27,772;  and  the 
section  48x100  feet  at  the  northeast  corner  of  Twenty-Second  and  Commerce 
Streets  is  worth  $22,578.  The  section  196x95  feet  fronting  on  Filbert  Street 
is  calculated  from  the  unit  value  of  $250  to  be  worth  $47,951;  and  the  corre- 
sponding section  196x48  feet  on  Commerce  Street  is  calculated  from  the  $150 
unit  value  to  be  worth  $20,845.     Total  value  of  block,  $419,234. 

Block  No.  9 — Unit  Values— Twenty-Second  Street,  $250;  Twenty-Third  Street, 
$250;   Cuthbert  Street,  $100. 

Although  the  line  of  Filbert  Street,  if  projected,  would  include  just  the 
southern  51  feet  of  this  block,  the  block  is  not  of  such  size  as  to  require  such 
treatment  to  make  it  most  available  for  use.  This  is  true,  although  at  one 
time  Filbert  Street  did  extend  between  Twenty-Second  and  Twenty-Third 
Streets  within  the  lines  of  the  block. 

The  point  of  contact  between  Twenty-Second  and  Twenty-Third  Streets 
is   midway   between    the   thoroughfares   a    distance    of    136.5   feet  from    each 


—22— 

street.  From  the  corner  tables  it  is  found  the  value  of  the  section  100x100 
feet  at  the  southwest  corner  of  Twenty-Second  and  Cuthbert  Streets  is 
$29,446;  and  the  value  of  the  section  100x100  at  the  southeast  corner  of 
Twenty-Third  and  Cuthbert  Streets  is  $29,446.  From  the  unit  value  of  $250 
the  section  fronting  59  feet  on  Twenty-Second  Street  is  found  to  be  worth 
$17,287;  the  section  fronting  56  feet  on  Twenty-Third  Street  is  calculated 
from  the  unit  value  of  $250  to  be  worth  $17,287;  and  the  section  fronting  73 
feet  on  Cuthbert  Street  is  calculated  from  the  $100  unit  value  to  be  worth 
$5,432. 

The  two  sections  of  this  block  respectively  fronting  on  Twenty-Second 
and  Twenty-Third  Streets  are  not  of  exactly  the  same  value,  as  one  has  three 
feet  more  frontage  than  the  other.  But  since  the  two  streets  are  of  exactly 
the  same  value  the  calculation  is  simplified  by  averaging  their  frontage  and 
making  the  calculation  that  way.  The  gross  value  is  correct,  but  if  the  lots 
were  in  separate  ownerships  the  calculations  would  not  be  correct  as  to  the 
individual   holdings.      Total   value   of   block,   $98,898. 

Block   No.    10— Unit   Values— Twenty-Third    Street,    $250;    Baltimore    &    Ohio 
Eailroad,  $100. 

The  point  of  contact  is  found  to  be  240  feet  from  Twenty-Third  Street 
and  145  feet  from  the  average  distance  on  the  Baltimore  &  Ohio  Railroad. 
As  the  lot  lines  are  irregular  the  zone  tables  are  used.  These  tables  show 
from  the  $250  unit  value  on  Twenty-Third  Street  that  the  first  240  feet  of 
this  lot  is  worth  $35,800,  and  the  rear  145  feet  abutting  on  the  Baltimore  & 
Ohio  Railroad  is  worth  $15,328.     Total  value   of  block,  $51,128. 

Block  No.  10A— Unit  Values— Schuylkill  River,  $100;  Baltimore  &  Ohio  Rail- 
road, $100. 

Because  of  irregular  lines  this  block  is  also  zoned.  The  ten  feet  abutting 
upon  the  river  is  found  to  be  worth  $2,793,  and  the  ten  feet  abutting  upon 
the  railroad,  $2,712.  A  small  intermediate  strip  of  land  is  worth  $440.  Total 
value  of  block,  $5,945. 

CONCLUSION. 

In  conclusion,  we  hope  that  this  sample  appraisal  will  show  the  com- 
plete practicability  of  the  use  of  the  Somers  System  for  the  valuation  of  land 
owned  by  interstate  railroads.  We  believe  that  the  most  severe  criticism 
possible  of  the  appraisal  submitted  herewith  will  show  that  it  is  correct 
within  the  narrowest  limits  of  possible  differences  of  opinion  as  to  the  relative 
and  actual  values  of  the  usefulness  of  the  streets,  and  the  effect  of  the  street 
accessibility  upon  the  several  lots  and  blocks  included  in  the  appraisal.  We 
shall  welcome  the  opportunity  of  discussion  of  these  values  with  the  Inter- 
state Commerce  Commission  and  the  proper  railway  officials.  We  believe  that 
this  valuation  will  stand  the  test  of  judicial  criticism  as  well  as  of  those 
who  are  familiar  with  land  values  in  the  section  of  the  city  of  Philadelphia 
through  which  the  appraised  line  runs. 

It  will  be  seen  by  reference  to  the  accompanying  map  that  unit  valu- 
ations have  been  made  of  streets  and  blocks,  extending  for  some  distance 
from   the   railroad    terminal   and   the   right-of-way.      All    of   this   was    deemed 


—23— 

necessary  by  our  appraisers,  in  order  that  the  information  concerning  the 
relation  between  the  land  appraised  and  the  contiguous  land  might  be  as 
complete  as  possible.  Wherever  the  Commission  may  appraise  a  terminal 
property,  similar  information  could  be  made  into  a  permanent  record,  and  it 
will  thus  be  possible  to  make  intelligent  comparisons  of  the  factors  entering 
into  the  appraisal  of  this  Philadelphia  terminal  and  the  connecting  right-of- 
way,  not  only  with  terminals  in  the  same  city,  but  also  with  terminals  in 
every  other  city  in  the  United  States. 


3  0112  061606841 


Manufacturers'  Appraisal  Company 

Has  been  organized  for  16  years.  Its  business  extends  throughout  the 
United  States  and  Canada.  Its  departments,  and  the  services  offered  by 
each    department,   are  as   follows: 

SOMERS  SYSTEM  DEPAETMENT 

Assistance  to  Railroads  for  Land  Valuation  and  to  Assessment  officials 
for  equalizing  assessments  by  the  use  of  the  Somers  Unit  System  of  Realty 
Valuation;  and  to  Cities  or  States,  or  for  Investigating  Committees;  City 
Surveys  and  Plats   furnished. 

INDUSTRIAL    DEPARTMENT 

Valuations  of  Factories  of  every  description,  Public  Service  Plants,  Rail- 
ways, Public  Buildings,  and  other  Physical  Property;  such  appraisals 
being  used  for  distribution  of  insurance,  proof  of  fire  losses,  mergers,  audits, 
rate  regulation,  etc. 

INSURANCE   COUNSEL  DEPARTMENT 

Legal  advice  on  all  questions  connected  with  fire,  liability,  boiler  and 
other  insurance;  reports  on  insurance  companies,  preparation  of  rider  forms, 
and  proof  of  loss  after  a  fire. 

HOME  AND  CLUB  INVENTORY  DEPARTMENT 

Valuations  of  Home  and  Club  Furnishings  of  every  description — useful 
for  fire  and  burglary  insurance  purposes — or  just  to  know  what  your  home 
contains. 

Manufacturers'  Appraisal  Company 


Walter  W.  Pollock  President  and  Gen.  Manager 

Charles   C.   Strawbridge    Vice -President 

Arthur  H.   Guild   Vice-President 

John  West    Secretary  and   Treasurer 

W.   A.   Somers    Land   Vol.   Actuary 

'  '.  Somers   System   Actuaries 

Walter  E.  Sweeting    \ 


Cleveland — (Executive    Offices)    Commercial    Bank    Building 

Philadelphia— 1072   Drexel  Building 

Chicago — Monadnock    Block 

St.  Louis— Merchants-Laclede  Building 

New   York — 305   Singer  Building 

Indianapolis — Commercial    Club    Building 


